Is biometrics the future of payment authentication?

No longer just a plotline in Minority Report, biometrics is already becoming part of daily life with fingerprint authentication available on most smartphones. So how long until retina scans are a reality in the payment industry?

Today’s shoppers are drowning in passwords and PIN codes, and while these security tools are well intentioned, bad consumer habits mean they can actually be less secure – despite all the warnings, we’re all guilty of using the same codes and combinations for plethora of accounts.

Yet these problems and irritations could soon be a thing of the past as the payment industry introduces biometric authentication to approve transactions.

These days, most consumers are already comfortable with using fingerprint scans to quickly unlock their smartphones, and recent studies indicate we’re ready to use the same process to make purchases with our credit and debit cards.

2017 Visa study found that 70% of Americans believe biometrics are easier than passwords or PINs and 46% think biometrics are more secure. The same survey also showed how badly new verification methods are needed, with only one third of respondents using a unique PIN or password for each of their accounts. Two thirds use the same information more than once, a practice that makes them more vulnerable to fraud.

However, consumers are warier of other types of biometric identification such as voice, face or eye scans, largely due to unfamiliarity, but adoption should be swift once the technology is ready for mainstream roll-out.

We spoke with Eric Le Berder, Ingenico Product Manager for Banks & Acquirers, to get an expert view on what biometrics can bring to the payments industry and how these new authentication methods can extend financial inclusion to less affluent segments of global society.

Will biometrics make EMV – or chip and PIN – obsolete?

Biometrics will never completely replace PIN codes. Instead, consumers will probably use a combination of authentication methods. For example, biometrics could be combined with geolocation or a PIN for greater security.

EMV released a new specification document last year, which for the first time mentions biometrics as a possible customer verification method. It's a silent revolution and we’re developing EMV capabilities compliant with this specification. In the near future, we'll be able to deploy terminals processing EMV payment transactions and incorporating biometric authentication.

What will be the benefits for merchants when offering biometric authentication for payment?

Merchants want the payment process to be seamless and as quick and secure as possible. The best way to achieve that is fingerprint authentication – all you need to do is put a finger on the sensor. It takes less than a second to process so it's pretty efficient.

By making the payment process quicker, it will also mean shorter queues at retailers’ checkouts, which is of course beneficial for shoppers too.

Aside from saving time at the checkout, what are the other advantages for consumers?

Generally, we all have to remember so many PINs and passwords; switching to biometrics will remove a lot of pain.

Biometrics will mostly be for card-present transactions – we’re still some way from biometrics for eCommerce.

Are there any challenges in terms of introducing biometrics to retail stores?

Ingenico delivers trustworthy payments services worldwide and builds value for customers by delivering security and convenience as quickly as possible at the point-of-sale (PoS). Biometric-based methods for customer verification will set new standards in that perspective. We can now incorporate fingerprint validation in EMV and alternative payments transactions with our new generation of terminals, which also covers biometric enrolment at the PoS. As with any new procedure in payments, it will take time and education to be seen as simpler and more efficient by our customers.

Does that mean that millennials are more likely to be the early adopters of biometric-enabled payments?

Younger people will lead the way – surveys have found that a significant number of people in their 20s say they will change banks if biometrics is not offered as an authentication method.

How can biometrics enable underbanked populations enter the financial system?

It’s a much simpler way to handle authentication. Biometrics are used in developing countries to provide services, especially to low income groups who may not have access to PIN-enabled cards.

In parts of Africa, Latin America and Asia, for example, governments rely on biometrics to ensure grants and subsidized goods such as food staples, liquid gas or fertilizers can reach the people who need them. It can also help prevent corruption.

Another way is to provide the poor with electronic money stored on a biometrics-enabled smart card, which they can then use to buy essential items locally – again it means the money really reaches the people it’s supposed to. Getting people familiar with digital transactions is a step towards bringing them into the banking system.

Which countries are going to lead in terms of biometric authentication for payments?

It could well be developing countries. In India, for example, Aadhaar is a huge biometric database through which the government offers online authentication for public and private sector services. Once a customer is authenticated, payments can be done anywhere and at any time through this system too.

And where is Ingenico focusing on in terms of rolling out biometric-based payment authentication?

We’re deploying terminals that cover both off-line and on-line authentication. We’re targeting countries like India, Brazil, South Africa – developing countries with a high population and a strong government biometric program to provide citizens with greater access to the economy.

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